Matrixport: $90,000 is the key price level to watch in determining Bitcoin's trend, and the wave of fund selling is nearing its end.

On March 21st, Matrixport issued a weekly report indicating that the recent wave of hedge fund Bitcoin sell-offs may be coming to an end. In the past few weeks, both the funding rates and benchmark rates have declined, and the open interest of Bitcoin futures on the Chicago Mercantile Exchange (CME) has significantly decreased, suggesting that the selling pressure now seems to have been mostly exhausted. However, Bitcoin is still in a consolidation phase and is unlikely to challenge new all-time highs in the short term. The process of Bitcoin's top formation started in early December 2024 with better-than-expected US job data, which initially weakened the momentum of altcoins. Bitcoin then reached its peak at the mid-December Federal Open Market Committee (FOMC) meeting. Although Bitcoin tried to rebound again before Trump's inauguration on January 20, 2025, the collapse of Trump meme coins led to the overall decline of the meme coin bull market. This series of events led to the formation of a top for altcoins, Bitcoin, and meme coins, pushing Bitcoin into its current consolidation phase. The Federal Reserve has now become a key factor in determining whether Bitcoin will break out of this range or face a deeper correction. Since Trump's election in November 2024, a clear trend has emerged: wallets holding 100 to 1,000 Bitcoins (valued at approximately $8 million to $80 million) have become the dominant group. This may reflect the long-term accumulation of Bitcoin by family offices and wealth management institutions, especially as regulatory clarity has increased. This structural shift is one of the key reasons why extreme retracements of 70-80% are no longer expected as in past Bitcoin cycles. Although this week's Federal Reserve meeting was not sufficient to trigger a significant rebound in Bitcoin and altcoins, it did mark a slight shift. Chairman Powell stated that the Federal Reserve will "look through" the recent rise in inflation expectations and does not believe that Trump's tariffs will lead to sustained high inflation. The Federal Reserve will adopt a wait-and-see approach rather than raising interest rates to address these inflation pressures. Although growth expectations have been lowered, the Federal Reserve will tolerate temporary inflation risks. Combined with a slowdown in quantitative tightening, the tone of this meeting can be interpreted as mildly dovish, providing some downside support for Bitcoin and stocks. Over the past three weeks, the Bitcoin price has been consistently below its 21-week moving average, indicating that we are currently in a bear market. Interestingly, in the summer of 2024, we also experienced some brief transitions from bullish to bearish signals. This indicator attaches great importance to the 21-week moving average; as long as the Bitcoin closing price is below $88,574, it must be recognized that we are in a bear market environment. If the closing price is above this level, a bullish stance will be adopted.